Re: The Revolution Will Not Be Televised (U.S Protests)

Re: The Revolution Will Not Be Televised (U.S Protests)

great job once more.
Will you please stop to consider WHAT this actually means? It might help to read the fucking articles and place an ounce of thought into this.

WHAT was the actual affect of this?
The banks were posturing that they were stronger than they were. They were claiming that they were lending money to each other at rates that were generally LOWER than what they were actually charging each other. It is mainly institutional investors that were being overcharged.

So all those extended markets that were pricing (most of them only in part) based off LIBOR were charging LOWER rates. The Mom&Pop equivalents were being charged less and the people who are furious right now are the BANKS who now realize they should have been charging more to lend money.

But no go ahead You just shout LIBOR LIBOR LIBOR RABBLE RABBLE RABBLE!!! $850 Trillion THE BANKS STOLE $850 Trillion!!!!!
like a good like media waggle.

Were the banks dishonest? sure. Did they do it for their own profit? sure. Was it a big deal? for the last fucking time: sure. It needs to be fixed.
But they did it to avoid showing signs of weakness and avoid regulation. It needs to be dealt with, but your fantasy that they're huddled in a dark smokey room trying to fuck up your life is idiotic.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by jackstraw94086

LOWER

And higher. It went both ways. But surely you know that...

You seem to be missing the fact that this drained money out of municipalities. Where people live. You similarly seem to be missing the point that banks do, in fact, collude with each other to get the desired outcome and it does, in fact, fuck people. All the time. And that does, in fact, support my belief that the same thing took place betwixt lenders, regulators, and derivatives traders in the run-up to the 2008 collapse.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by PotVsKtl

And higher. It went both ways. But surely you know that...

You seem to be missing the fact that this drained money out of municipalities. Where people live. You similarly seem to be missing the point that banks do, in fact, collude with each other to get the desired outcome and it does, in fact, fuck people. All the time. And that does, in fact, support my belief that the same thing took place betwixt lenders, regulators, and derivatives traders in the run-up to the 2008 collapse.

yes, that's why I said "generally lower", but even Taibbi admits that it was probably only rarely higher, and I haven't seen any good rationale for yet for the higher rates (but I won't deny their existence, where are they?).

The basic point you refuse to get is that this is mainly banks stealing from each other.
I will entertain your notion of banks "draining money out of municipalities". where is that? please explain.

And for the last I have never denied that some banks do in fact collude and fuck people. To you, the simple admission that not all banks and bankers are solely focused on stealing poor people's money is an emphatic denial of any wrongdoing. anywhere. ever. You are a fucking bore. cut it out.

Re: The Revolution Will Not Be Televised (U.S Protests)

Cities and municipalities around the country have contracts tied to LIBOR. Nassau County is saying they lost possibly up to 13 million. Also the city of Baltimore has filed a class action lawsuit in federal court.

Re: The Revolution Will Not Be Televised (U.S Protests)

And they will lose. Bad investments are caused by stupidity not illegal activities.

The Barclays Municipal Index rose 3.66 percent through the first half of the year, and municipal bond funds saw $317 million in inflows for the most recent reporting week, according to Lipper data.

"In terms of the latest news with the city of San Bernadino, there's really been no impact in the market," says Susan Courtney, municipal desk analyst and lead portfolio manager for Prudential Fixed Income's municipal bond fund. "That's largely due to the fact that technicals are really strong in terms of the amount of investment money coming in, and San Bernadino is a relatively small issuer in the overall market."

So until more systemic problems start to show up, the view in muniland is that the Whitney projection remains largely unfulfilled — for now.

"San Bernadino, Stockton, Harrisburg, Jefferson County (Ala.) — all of them are long, protracted credit events, not events that came out of the blue," Breckenridge's Coffin says. "With good research and careful oversight, investors can navigate through this market and invest reliably and with very little risk when compared to other markets."

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by faxman75

Cities and municipalities around the country have contracts tied to LIBOR. Nassau County is saying they lost possibly up to 13 million. Also the city of Baltimore has filed a class action lawsuit in federal court.

So that does suck, but we'll see how much of those loses are finally attributed to the banks.
and again THIS IS A BIG FUCKING DEAL, but these cities need to skullfuck their whomever it was that let them get so deeply leveraged that the losses were that significant based on small (yes, small) fluctuations in an index which has the lesser influence on the rates they got to replace their huge debt.
These bonds are by all accounts are only marginally tied to LIBOR, they're not wholly based on it. They're like a butcher who's pissed because his supplier sells meat a little cheaper to someone else and lied about it. Yes, an oversimplification, but it's not as if they're put out of business, they didn't make as much money as they feel they should have.

and of course the obligatory, YES THERE IS SUCH A THING AS AN EVIL BANKER WHO DOES EVIL THINGS.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by PotVsKtl

What is this supposed to mean? What does it have to do with whether or not LIBOR manipulation deprived cities of otherwise due payments?

It wasn't unethical actions as a result of bankers manipulation of LIBOR that caused muncipalities to end up bankrupt. It was sloppy money management by controllers. Manipulation by unions for unrealistic pensions and health care. It was also the borrowing and spending of stimulus funds on based on some Playadelwes's prediction of huge revenue influxes. The housing market/bubble in California has been hyper inflated since the 80's. Any half wit could see that you cannot base your revenues on property tax especially in California. The diamond encrusted jet ski is bound to break down.

I want to be a fire chief pulling down a $400000 salary. Wise investing.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by Tubesock Shakur

It wasn't unethical actions as a result of bankers manipulation of LIBOR that caused muncipalities to end up bankrupt. It was sloppy money management by controllers. Manipulation by unions and borrowing and spending of stimulus funds on based on some Playadelwes's prediction of huge revenue influxes. The housing market/bubble in California has been hyper inflated since the 80's. Any half wit could see that you cannot base your revenues on property tax especially in California. The diamond encrusted jet ski is bound to break down.

I want to be a fire chief pulling down a $400000 salary. Wise investing.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by Tubesock Shakur

It wasn't unethical actions as a result of bankers manipulation of LIBOR that caused muncipalities to end up bankrupt. It was sloppy money management by controllers. Manipulation by unions for unrealistic pensions and health care. It was also the borrowing and spending of stimulus funds on based on some Playadelwes's prediction of huge revenue influxes. The housing market/bubble in California has been hyper inflated since the 80's. Any half wit could see that you cannot base your revenues on property tax especially in California. The diamond encrusted jet ski is bound to break down.

I want to be a fire chief pulling down a $400000 salary. Wise investing.

In other words it has nothing to do with the topic. Thanks for the random rant.

Re: The Revolution Will Not Be Televised (U.S Protests)

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by PotVsKtl

Baltimore has no basis to sue over LIBOR because... uh... unions!

They have every right to sue. They won't win much if anything at all. The made bad bets......investments on a rigged interest credit swaps/muni, that they knew more than likely were bound to fail. It's unfortunate that it works for some but most of the time default swaps are set up to fail. "Stupid"investments by corput city officials and even more corrupt money managers.

New Jersey taxpayers are being saddled with a bill of about $657,000 a month from Bank of Montreal for an interest-rate swap approved by state officials and linked to bonds that were never sold.
The 11th-largest U.S. state by population, which is cutting expenses to close a $1 billion budget deficit, will pay Canada’s oldest lender $23.5 million. The sum, about the same as the salaries for 113 teachers over three years, will allow it to avoid a $50 million penalty for canceling the contract, which was tied to planned sales of school-construction bonds.
The interest rate swap, an agreement between borrowers to exchange fixed and variable-rate payments on a set amount of debt, was arranged in 2004 to protect taxpayers against rising borrowing costs. The strategy backfired after officials decided against issuing the securities.
“This is a classic case of a strategic error,” said Robert Brooks, a finance professor at the University of Alabama- Tuscaloosa and author of a book on derivatives. “It’s arrogant to believe that you have such a command of the future that you know with certainty what is going to happen.”
The payments, which work out to $21,892 a day for three years, show how elected and appointed officials failed taxpayers by agreeing to financial strategies they didn’t fully understand. New Jersey spent $21.3 million in 2008 to exit three contracts signed when James Florio and James McGreevey were governors. The state’s transportation trust fund is giving almost $1 million a month to a Goldman Sachs Group Inc. partnership in an agreement linked to bonds that were redeemed.
Penalties and Losses
New Jersey isn’t alone. Borrowers from Massachusetts to California are struggling with billions of dollars in swap penalties and losses at the same time that budget deficits expand to an estimated $350 billion in 2010 and 2011, according to the Washington, D.C.-based Center on Budget and Policy Priorities.
The derivatives, mostly interest-rate swaps used to exchange fixed payments for variable rates, have grown to as much as $300 billion annually, the Alexandria, Virginia-based Municipal Securities Rulemaking Board said in an April report, citing information from market participants.
Derivatives have created “unprecedented financial stress” for some of the 500 municipal issuers that sold variable-rate debt and purchased swaps from banks to lock in borrowing costs, according to an October report by Moody’s Investors Service. The biggest users of the arrangements are Pennsylvania, California, Texas and Tennessee.
The U.S. Justice Department and Securities and Exchange Commission are investigating whether Wall Street banks conspired with brokers to rig bids on the contracts.
Forward-Starting Agreement
Jefferson County, Alabama, is on the edge of bankruptcy mostly because of a $3 billion sewer project in which fixed-rate bonds were refinanced into floating-rate securities hedged with interest-rate swaps. Larry Langford, the former Democratic mayor of Birmingham, was convicted of federal corruption charges Oct. 29 for accepting bribes in exchange for giving underwriting contracts to a banker friend while he was county commission president.
New Jersey’s 2004 school-bond swap with Bank of Montreal was linked to a $250 million bond originally scheduled to be sold in 2007. The so-called forward-starting agreement was one of 15 such contracts the state set up to help finance construction.
The issue was deferred to 2009 because the school program wasn’t borrowing fast enough to use swaps coming due in 2007, according to treasury spokesman Tom Bell.
Fixed Rate
Under its contract, New Jersey agreed to pay the bank a fixed rate of about 4.6 percent, or $967,000 a month, on the $250 million principal. In return, it would receive unspecified variable-rate payments based on a percentage of the one-month London interbank offered rate, according to Treasury Department spokesman Tom Vincz.
The one-month rate was 0.23 percent on Dec. 3, down from 1.9 percent when the Bank of Montreal swap was set up, according to the British Bankers Association One-Month Libor U.S. Dollar Index. Libor is a benchmark for the cost of loans between banks.
In pushing the swap off to 2009, New Jersey agreed to a 9 basis-point reduction in its fixed interest rate and the bank changed the floating-rate formula to a lower percentage of Libor. A basis point is 0.01 percentage point.
When the revamped agreement took effect on Nov. 1, the state faced payments of $833,000 a month, Vincz said in an e- mail. Treasury officials allowed the bank to suspend floating- rate payments while lowering New Jersey’s fixed-rate cost to 3.1 percent, or $656,770 monthly, through November 2012.
Typical School
The cost would cover the $23.6 million price of a typical elementary school, according to New Jersey Schools Development Authority reports. It would also pay 113 teachers’ salaries for three years, based on data reported by the state Teachers Pension and Annuity Fund.
“It is obscene,” New Jersey Governor-elect Christopher Christie said at a Nov. 16 news conference in Trenton, referring to financial strategies such as swaps pursued largely during McGreevey’s term from 2001 to 2004. “It is extraordinary to me that someone could do that much damage in less than three years.”
McGreevey, who resigned in 2004 after saying he was gay, didn’t respond to phone messages left at his home and the office of his partner, Mark O’Donnell, at real-estate developer Kushner Cos. in New York City. The former governor also didn’t return a message left at the Episcopal All Saints Parish in Hoboken, New Jersey, where he serves as an assistant while seeking a Master of Divinity degree at Manhattan’s General Theological Seminary.
$3.4 Billion
John McCormac, Christie’s transition team economic development and growth adviser who served as state treasurer when most of New Jersey’s swaps were arranged, hung up when asked about them on Nov. 11.
“OK, thanks for calling,” McCormac, mayor of Woodbridge Township, said before disconnecting.
New Jersey refinanced $3.4 billion of debt tied to derivatives last year, according to a report from the state Treasury Department’s Office of Public Finance.
The renegotiated swap lets New Jersey avoid a termination fee, estimated at $50 million in an Oct. 31 state report. It will allow the original swap to be reinstated if officials want to sell school-construction bonds in 2012, Vincz said in the Nov. 16 e-mail.
Diligent Work
“We are working diligently to manage and reduce the cost of the swap portfolio this administration inherited,” he said. “This temporary solution limits swap costs for a three-year period, after which time the state will retain the option of applying the original terms with a future borrowing as a hedge against rising interest rates.”
“We are not in a position to comment, out of an obligation of confidentiality to the client,” Kim Hanson, a spokeswoman for Bank of Montreal, said in a phone interview.
Peter Nissen, a financial adviser in Marlboro, New Jersey, who worked on the swap while at Public Financial Management, the state’s Harrisburg, Pennsylvania-based adviser, declined to comment.
Marty Margolis, managing director at PFM, said in a phone interview that Nissen worked independently on the contract and hasn’t been associated with the company for more than two years.
“That swap was done by someone who hasn’t worked for the company for several years,” Margolis said. “I know nothing about it.”
Except for two deals to stem losses from existing derivative contracts, New Jersey has entered into no new swaps since Governor Jon Corzine, the former co-chairman of Goldman Sachs, took office in 2006, according to Vincz. Christie, a former U.S. prosecutor, defeated Corzine last month and is to be sworn in Jan. 19.
UBS Contract
New Jersey paid $21.3 million last year to end three derivative contracts connected to bonds for business-incentive grants, the River Line Light Rail project from Trenton to Camden and the New Jersey Sports and Exposition Authority. On Nov. 18, the Delaware River Port Authority, a bistate agency that runs toll bridges and a rail line to Pennsylvania, agreed to give Zurich-based UBS AG $111 million if the authority can’t issue variable-rate debt to make use of an existing swap by February.
The state Transportation Trust Fund Authority is paying almost $1 million monthly to Goldman Sachs Mitsui Marine Derivative Products L.P., a partnership of the New York-based bank and Japan’s Mitsui Sumitomo Insurance Group Holdings Inc., under a swap agreement made during McGreevey’s administration in 2003. The derivatives were linked to $345 million in auction- rate bonds sold to finance road and rail projects.
Fixed-Rate Debt
While New Jersey replaced the debt with fixed-rate securities in 2008, the derivative payments aren’t scheduled to expire until 2019. The state plans to sell $150 million in variable-rate bonds on Dec. 7 to make use of part of the swap.
The state treasury “should continue to aggressively manage the termination, conversion and management of swaps that this administration inherited, while dealing with the realities of the most difficult credit conditions in history,” Corzine’s former spokesman, Steve Sigmund, said in an e-mail on Oct. 22.
New Jersey passed up borrowing costs of 4.6 percent to 4.9 percent when it opted to issue variable-rate bonds tied to swaps during McGreevey’s tenure, a 2008 state analysis shows. The net interest cost on the debt was about 4 percent while the original derivative agreements were in effect, according to the report.
Revenue Bonds
The yield on 25-year fixed-rate revenue bonds is now 4.98 percent, up from a yearly low of 4.69 percent in early October, according to a Bond Buyer Index.
Derivatives can save taxpayers money over longer periods if they’re managed properly, said Peter Shapiro, managing director of Swap Financial Group LLC, in South Orange, New Jersey, an adviser to companies and governments.
“Will municipal officers ever take for granted that floating-rate bonds will be dull, boring and predictable means of finance?” he said in a phone interview. “No, and they probably never should have.”

Re: The Revolution Will Not Be Televised (U.S Protests)

Source: Swaps Nightmares Become Real for Amateur Financiers: Joe Mysak Bloomberg, December 16, 2009
"A report by Pennsylvania’s auditor general shows what the nation might have looked like if all municipalities had embraced swaps and derivatives as those in the state did.
Two examples show the challenges facing citizen financiers across the nation.
Some Pennsylvania school board officials thought that a synthetic fixed-interest rate, a term used by bankers selling them on a variable-rate bond coupled with a swap, was just as safe as a regular old fixed-rate bond.
“As it turns out,” the report says, “the ‘synthetic fixed-interest rate’ created by the Qualified Interest Rate Management Agreement was only accurate if several variables in the financial markets behaved appropriately.”
The auditor general wrote that the use of the swaps on one issue has already cost one school district $10.2 million more than if it had used fixed-rate bonds, and $15.5 million more than a variable-rate structure.
Then there’s the matter of termination payments, which so many municipalities and other institutions, in Pennsylvania and elsewhere, are making right now to get out of interest rate swaps. One school district superintendent said a termination payment wasn’t a loss; it was the cost of refunding underlying debt.
The auditor general disagreed: Had the district not exposed itself to risk by entering into the swap, it wouldn’t have had to pay $12.3 million to terminate the agreement.
How It Works
Take that synthetic fixed-interest rate. What the term really means is a fake fixed-interest rate. There’s nothing “fixed” about it. A municipality sells debt whose interest rate changes every week or month. It then enters into a swap with a bank. The municipality pays the bank a fixed rate, and receives a floating rate in return.
The idea here is that the two floating rates will cancel each other out, leaving the municipality with a loan that costs even less than borrowing with a traditional long-term bond.
So let’s say a municipality sells insured, variable-rate debt at 1 percent. It then enters into a swap with a bank, under which it will pay the bank a fixed 3 percent, and receive a variable payment, now also, let us say, 1 percent. The two variable payments (almost always tied to different indexes) cancel each other, and the municipality pays 3 percent at a time when it might have had to pay 4 percent to borrow in the conventional bond market.
The banker on this deal tells the municipal officials that they are “locking in” the long-term rate. “Locking in” was a favorite expression of the bankers putting together these transactions.
Disaster Strikes
So far, so good. But then let’s say the bond insurance company backing the municipality’s variable-rate debt is downgraded. The variable rate shoots up to 2 percent from 1 percent. Then something else happens. As the financial world collapses, governments cut interest rates to nothing. This is reflected in the floating rate the bank pays the municipality.
Now the municipality pays the fixed 3 percent to the bank, and the 2 percent to the holders of its variable-rate bonds, and receives, say, one-quarter of 1 percent from the bank on its swap. The municipality is no longer paying 3 percent to borrow money. It is paying 4.75 percent, and there goes the budget. As the Pennsylvania auditor general pointed out, municipalities rarely budget for financial-instrument catastrophe.
This is a simplified version of what happened across the country in 2008 and 2009.
‘Impenetrably Complex’
As for concealing those swap termination payments in new bond issues designed to refund the old deals, this was going on for years. You could never get issuers or their bankers to say that they had lost a bet on a swap, because they never wanted to treat a swap as a discrete thing. It was part of an endless stream of financings.
The Pennsylvania Auditor General, Jack Wagner, is no fan of swaps. His report concluded that they are “highly risky and impenetrably complex transactions that, quite simply, amount to gambling with public money.” He asked the state to forbid their use, recommended municipalities avoid them “from this day forward,” and advised those who did use them to terminate the things immediately.
Just so nobody would misunderstand, Wagner asked the General Assembly to prohibit the state’s municipalities from using swaps “or any of the specific devices and techniques encompassed therein currently in existence or yet to be invented in connection with the issuance of public debt.”
‘Yet to be Invented’
Got that? I have never seen such language used in a case study involving municipal bonds: “Yet to be invented.” Wagner knows his investment bankers all too well, it seems.
In Pennsylvania, the bankers pushing these products were very successful. The result is that local governments and school districts across the state are faced with higher debt service costs or multimillion-dollar termination payments. Public officials, most of them, didn’t quite understand what they were getting into.
Not all states allow their municipalities to purchase such financial products. Some states are silent on the matter. Others prohibit their use. In 2003, Pennsylvania passed a law authorizing local governments to engage in swaps.
It did so with gusto. Of the 501 school districts in the state, 107 entered into at least one Qualified Interest Rate Management Agreement, the state’s term for swaps and derivatives. Another 86 local governments did the same. Between October 2003 and June 2009, these 193 entities made 626 filings related to $14.9 billion in debt, according to the Wagner report.
Popular in Pennsylvania
To put this into context, Pennsylvania leads the nation in the use of these instruments, according to one rating company’s estimate. Of the 500 issuers Moody’s Investors Service rates that use swaps and variable-rate debt, Pennsylvania accounts for 22 percent (or 110) of them. California and Texas share second place, at 17 percent, with Tennessee third, at 13 percent.
There are lots of lessons to be learned here. The first one is that municipalities are best served by simplicity. Introducing more and more moving parts into bond finance also introduces more risk.
The second lesson is even simpler. You can’t educate the changing cast of citizen financiers in charge of the municipal market to the Wharton or MIT level necessary to understand some of the things Wall Street wants to sell to Main Street.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by jackstraw94086

You are the densest moron I could ever even conceive of. Read before saying something you think might be clever. This is about a fucking stupidly written article. Nobody has ever said that bankers didn't lie or their lies had no affect or that it wasn't huge. Go overdose please.

You mean had no effect, not had no affect.

Originally Posted by amyzzz

Hannah, I don't know that pigs have big weiners, and my early 20's facination with dogs because of weiner size, I think. If that helps.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by Tubesock Shakur

Again no one is doubting this.

You said they were going to lose their case that LIBOR cost them money because they made bad bets. Which has nothing to do with their case. I don't doubt they'll lose their case, but I suspect it won't be because firemen have pensions.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by PotVsKtl

You said they were going to lose their case that LIBOR cost them money because they made bad bets. Which has nothing to do with their case. I don't doubt they'll lose their case, but I suspect it won't be because firemen have pensions.

100% chance there is a settlement. Poorly run governments get payday from deep pockets along with sympathy of constituents as 16 big bad banks admit to wrongdoing by offering to settle.

The efforts to calculate potential losses are complicated by the fact that Libor is used to determine the cost of thousands of financial products around the globe each day. If Libor was artificially pushed down on a particular day, it would help people involved in some types of contracts and hurt people involved in others.

Securities lawyers say the lawsuits will not be easy to win because the investors will first have to prove that the banks successfully pushed down Libor for an extended period during the crisis, and then will have to demonstrate that it was down on the day when the bank calculated particular payments. In addition, investors may have to prove that the specific bank from which they were receiving their payment was involved in the manipulation. Before it even reaches the point of proving such subtleties, however, the banks could be compelled to settle the cases.

Re: The Revolution Will Not Be Televised (U.S Protests)

Originally Posted by PotVsKtl

What is this supposed to mean? What does it have to do with whether or not LIBOR manipulation deprived cities of otherwise due payments?

It's the "otherwise due payments" that is the iffy issue. There's no guarantees that these cities would have structured their debts this way had the rates been influenced by those 30-40 basis points otherwise (although admittedly they likely would have) even if the loans were based entirely on LIBOR. There are probably a lot of factors. YES they did get fucked (to some degree, likely less than they're claiming, which is natural). It would be hard to award full damages for loss, because of an indirect (yes, indirect, you will never prove they set out to steal from cities) actions.

Of course the cities are going to sue to cover losses resulting more from bad decisions than from the small shift in an index that comprises a fraction of their loan rate. why not.

Re: The Revolution Will Not Be Televised (U.S Protests)

The most amazing thing in all this to me is the realization that the underpinnings of global finance are tied to a benchmark that is based on estimates, not hard data. Estimates are much more easily manipulated and so the banks manipulated them because they could.

In theory, LIBOR is supposed to be a pretty honest number because it is assumed, for a start, that banks play by the rules and give truthful estimates. The market is also sufficiently small that most banks are presumed to know what the others are doing. In reality, the system is rotten. First, it is based on banks’ estimates, rather than the actual prices at which banks have lent to or borrowed from one another. “There is no reporting of transactions, no one really knows what’s going on in the market,” says a former senior trader closely involved in setting LIBOR at a large bank. “You have this vast overhang of financial instruments that hang their own fixes off a rate that doesn’t actually exist.”

A second problem is that those involved in setting the rates have often had every incentive to lie, since their banks stood to profit or lose money depending on the level at which LIBOR was set each day. Worse still, transparency in the mechanism of setting rates may well have exacerbated the tendency to lie, rather than suppressed it. Banks that were weak would not have wanted to signal that fact widely in markets by submitting honest estimates of the high price they would have to pay to borrow, if they could borrow at all.